Marathon Oil Shares Initiated At Buy, $21 Target By KLR: Full Catalyst Outlook

KLR Group's John Gerdes initiated Marathon Oil Corporation MRO at Buy with a price target of $21.00. According to Gerdes, Marathon's main growth drivers include developments in Eagle Ford, Anadarko Basin and Williston Basin.

Gerde's selected management comments:

Eagle Ford

"Marathon is conducting a five righ Eagle Ford program" and plans to drill 140-150 wells within 2016 with all wells "utilizing tighter frack stage spacing (~200' per frack stage)" said the analyst. Eagle Ford currently comprises of about 31 percent of production and 40–45 percent of capex.

Anadarko Basin -SCOOP/STACK

 "Marathon is conducting a two-rig Anadarko Basin program," planning to bring 80-90 basin wells online in 2016. The Anadarko Basin "SCOOP/STACK" comprises of about 7 percent of production and 15 percent of capex for Marathon.

Williston Basin – Bakken/TFS

Marathon planned to bring 75–85 Bakken/TFS wells contributing to a net resource potential of 800 Mmboe in the region stated Gerdes. The Williston Basin currently comprises about 15 percent of production and 10–15 percent of capex according to the analyst.

Based on these growth prospects, Gerdes believed Marathon Oil shares should have appreciated by about 50 percent.